Leveraging Green Finance for Enhancing Financial Efficiency in Public Procurement: The Case of Ukraine Under Martial Law

Abstract

The full-scale invasion of the Russian Federation into the territory of Ukraine in February 2022 caused a deep socio-economic crisis that affected all spheres of public administration, including the financial system. The destruction of infrastructure, a decrease in business activity, mass migration of the population and the constant need to finance military needs have created new challenges for budgetary and fiscal policy. In the context of particularly urgent resource shortages, there is a review of approaches to public finance management with a focus on long-term economic and environmental sustainability. That is why the integration of green financing into public procurement practices is considered a promising tool for increasing transparency, efficiency and compliance of expenditures with sustainable development criteria. Green financing covers the use of financial resources for the implementation of projects that contribute to environmental protection, increasing energy efficiency, reducing carbon emissions and adapting to climate change. Its application in the public procurement system of Ukraine through a platform like Prozorro opens up opportunities for introducing environmental criteria when selecting suppliers, stimulating “green” business initiatives and minimizing corruption risks. According to the World Bank, Ukraine’s GDP has decreased by more than 30% since the start of the full-scale war, and the share of public procurement in the GDP structure is about 15%, reflecting the critical weight of this segment for ensuring fiscal stability. Combined with a policy of clear environmental transformation, green modernization of procurement can be a reason for economic recovery, adaptation to the challenges of war and strengthening the institutional efficiency of the state.